Coalition might need to have patience over Senate bills

More than three-quarters of the Coalition’s $31.6 billion in savings will rely on Labor, Greens and minor parties’ senators agreeing to abolish the mining tax and carbon tax.

Coalition leader
Tony Abbott
, if he becomes prime minister, will not be able to pass laws without the support of Labor and the Greens, which control Senate numbers until next June 30.

Mr Abbott has promised in his first 100 days of government legislation that he would repeal measures associated with the carbon tax and the mining tax, but it is unlikely the Senate will allow the abolition of the taxes until after July 1, 2014, when a new Senate term begins.

Some contentious savings measures are spending programs – ranging from the $4.6 billion Schoolkids Bonus to small business tax breaks – intended to be funded by the mining tax, which is expected to raise just $4.4 billion after company tax deductions.

ACIL Allen executive director of economics
Stephen Bartos
said it was “quite conceivable" some of the Coalition’s savings measures could sit in legislative limbo for years.

Mr Bartos said some of former prime minister John Howard’s social security measures were held up for two years while he faced a hostile Senate.

Mr Abbott would be very unlikely to pass his legislation before December 17 – the end of Mr Abbot’s 100 days – and may have to play a waiting game. “If I was them I would introduce the legislation with the budget because the Senate is less likely to reject a budget bill," Mr Bartos said.

Many of the savings measures were not expected to start until July 1, so delaying the introduction of the legislation would not have a material impact on the budget.

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However Mr Bartos said the possibility of a hostile Senate continuing beyond July 1, depending on the outcome of Saturday’s election, could have a more lasting impact on the state of the federal budget.